Opinion

Patrick McIlheran

Nice 401(k) you've got, Mr. Lucky

Little noticed, some Democrats in Congress have been thinking about the 401(k), retirement hope of millions. They don't seem to like it.

Reps. George Miller of California and Jim McDermott of Washington, both Democrats, head a couple of committees that make law about retirement accounts. They've been listening to critics of 401(k) plans, including an economics professor who's got a notion to force people into a government-run replacement. "That is part of the discussion," said McDermott's spokesman. It's time for a "wholesale re-examination" of retirement, said Miller last week.

All of this is mere posturing by Congress until you remember this: None of what the congressmen say is out of line with Democrats' long mourning over the decline of old-fashioned pensions and their aversion to private retirement accounts.

And if Barack Obama wins the White House for the Democrats, these may be the mainstream ideas of the party in complete control.

For now, it's just policy noodling - progressives seeing the polls and anticipating their dawn. The plan that Miller and McDermott liked, by economist Teresa Ghilarducci, has been peddled for at least a year by the influential left-leaning Economic Policy Institute. It would repeal the law by which you don't pay taxes on money you put into your 401(k) or earn in it. The accounts would be taxed as any investment.

Meanwhile, all workers whose employers don't offer a sufficiently generous pension would be required to divert 5% of their pay into an account handled by the Social Security Administration. It would be invested in government bonds and would supposedly provide a return of 3%, no more, no less.

Why do this, when nearly any prudent 401(k) can double that return long-term with a middling mutual fund? Because 401(k)s are unfair, Ghilarducci says - lots of people don't save into them, so the break goes to a "lucky few." The congressmen, meanwhile, heard from retirees whose investments have tanked, and you can bet that millions of voters who are nearing retirement after having ignored savings would love to shift the burden onto employers or government.

Anyway, the risk that the government will shaft the thrifty is so far just rumbling from congressmen. Obama has not breathed a word for or against the idea.

But recall Joe the Plumber. The Ohio man asked Obama a good question: Where do you get off jacking up taxes on me when I strike it rich via hard work and enterprise? Obama's rambling, unguarded answer was telling. He said that plumbers do better when "folks from the bottom up" have money to get their plumbing fixed. Obama concluded, "I think when you spread the wealth around, it's good for everybody."

Only by "you," he didn't mean the plumber. Hiring people or buying pipe won't spread it sufficiently, he implied; only government will via taxation. Obama meant, "when I spread the wealth around as president."

And by saying "the wealth," he erased the reality that it was the plumber's wealth or your wealth or my wealth - wealth earned by and belonging to someone.

This haziness isn't unexpected. This is the man who, in a 2005 speech at the National Press Club, characterized economically successful people as "those of us who have won life's lottery." If things turn out badly because of "fate," he said, "our larger American family will be there to lift us up." He then detailed that family as being New Deal programs. He explicitly describes his tax policy as a means for reducing "inequality." In a long, fawning profile in The New York Times in August, writer David Leonhardt called Obama a "market-oriented redistributionist."

Obama is not out of line with Democratic progressives, who often describe the economy in terms of jackpots and luck. Plainly, we're all lucky to be living in America, but if one thinks of success as luck, it's natural to regard earnings not as your wealth but as the wealth. It is natural to distrust the way some people sock away money and to prefer a federally administered evenness.

So far, deep-sixing the retirement plans of millions of working Americans is just the intellectual toy of some leading congressional Democrats. All Obama has mentioned is letting people more readily raid their accounts amid hard times - that and taxing the daylights out of the companies whose stock is in your 401(k).

But if he is president when Congress floats some notion to penalize thrift and re-socialize retirement, will he check his own party? Maybe. I'd feel more comfortable if he knew the distinction between the wealth and your wealth.